Question

Valve is a software company that makes video games. Officially, all the employees report to the CEO. There are no other official managers. This means the CEO’s ________ is larger than generally recommended.

Answer 1

Answer: B, Span of control

Explanation:

A manager's span of control refers to how many people report under them. If an employee can report directly to a manager then they are in that manager's span of control.

Spans of control should not be so large that they can lead to inefficiency. Modern organizational experts recommend a span of control between 5 - 15 subordinates.

Every organization should have managers so that information and decisions can be handled faster and to achieve diversification of labor which improves efficiency. In the scenario mentioned, the company will probably not be efficient because for instance, all information will have to flow to the CEO for decision making before being approved making the decision making process slower which could be costly when time is of the essence.